Reckitt Benckiser

Reckitt Benckiser is the fastest growing of the major FMCG companies. Although the original Benckiser business was started in Germany in 1832 and Reckitt in the UK in 1840, Reckitt Benckiser very much sees itself as beginning from the merger of these two companies in 1999. That is very much day 1.

Reckitt Benckiser has used organic growth powered by fast incremental innovation to move into leadership positions in the vast majority of categories in which it operates. In 1999 Reckitt Benckiser had around 20,000 employees, produced net revenues of just over £3 billion, and had an operating profit of £357 million. Ten years later, with only an extra 5000 employees, revenues had more than doubled to nearly £8 billion and profits had risen by more than five times to nearly £2 billion. How this is achieved is very clear: as Bart Becht, former CEO, said in 2010: “We have a very simple approach to the business: focus on powerbrands in fast-growing categories, innovate and invest behind them – and do so in every market.”

For Reckitt Benckiser growth is driven by high-impact innovation via new product development to drive category growth and market share within those categories and bonuses are linked to the financial success of products and there is a clear line of sight between the targets communicated to investors and the top down driven targets within the organization.

Although now considered to be a major multinational, Reckitt Benckiser at heart still behaves and is organized like a small company and the combination of simple structures, high level of empowerment and clarity of purpose enables Reckitt Benckiser to respond quickly to challenges, align resources, and exploit growth opportunities.

The focus on speed and delivery influences how Reckitt Benckiser use insight which for them is defined as the line at the top of a written concept that defines the position and relevance of a new product in a consumer’s life. The importance of consumer market tests in particular is elevated above all other sources of insight and concept validation and unlike other companies it is not about an exploration of deep and motivating consumer truths but about products and product concepts and how consumers will respond.

So whilst Reckitt Benckiser do not spend time on long term foresight they have the capabilities to continue to deliver insight-driven fast incremental margin-enhancing product innovation

Comments are closed.